SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): June 20, 2002
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SONTRA MEDICAL CORPORATION
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(Exact Name of Registrant as Specified in Its Charter)
Minnesota
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(State or Other Jurisdiction of Incorporation)
0-230 17 41-1649949
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(Commission File Number) (IRS Employer Identification No.)
58 Charles Street, Cambridge, Massachusetts 02141
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (617) 494-4337
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Effective June 20, 2002, pursuant to an Agreement and Plan of
Reorganization, dated as of February 27, 2002, as amended as of May 14, 2002,
(the "Merger Agreement"), by and among ChoiceTel Communications, Inc. (the
"Company"), CC Merger Corp., a wholly owned subsidiary of the Company ("Sub"),
and Sontra Medical, Inc. ("Sontra"), Sub merged with and into Sontra (the
"Merger"), with Sontra as the surviving company. Following the Merger, the
Company changed its corporate name to Sontra Medical Corporation and began
operating in Sontra's line of business.
Promptly after the effective time of the Merger, the Company will issue
an aggregate of approximately 6,210,289 shares of its common stock in exchange
for all of the outstanding shares of capital stock of Sontra, resulting in the
shareholders of Sontra owning an aggregate of approximately 67% of the
outstanding common stock of the Company and the existing shareholders of the
Company owning an aggregate of approximately 33% of the outstanding common stock
of the Company. Pursuant to the terms of the Merger Agreement, each outstanding
share of Sontra capital stock converted into the right to receive 0.1927 shares
of common stock of the Company. Each holder of Sontra capital stock who is
otherwise entitled to a fraction of a share of Company common stock will receive
cash in lieu thereof. Outstanding options to purchase stock of Sontra were also
converted into the right to purchase Company common stock based upon the
exchange ratio set forth above.
In connection with the Merger, the composition of the board of
directors of the Company was changed to consist of eight directors, six of whom
were selected by Sontra. The foregoing description of the Merger and the Merger
Agreement is qualified in its entirety by reference to such agreement and the
press release of the Company issued on June 24, 2002, copies of which are filed
herewith as Exhibits 2.1 and 99.1, respectively, and each of such exhibits is
hereby incorporated herein by reference.
Any statements contained in the press release that are not historical
facts are forward-looking statements. In particular, statements using the words
"will," "plans," "expects," "believes," "anticipates," or like terms are by
their nature predictions based upon current plans, expectations, estimates, and
that could significantly affect outcomes, which may differ materially from the
forward-looking statements. Specific risks applicable to such forward-looking
statements include risks associated with the failure to conclude any proposed
agreement and/or changing conditions in the marketplace. Other risks and
uncertainties associated with the business of the Company may be reviewed in its
public filing on Form S-4/A. Those documents are publicly on file with the U.S.
Securities and Exchange Commission (the "Commission").
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Prior to the Merger, the Company's independent accountant was Schechter
Dokken Kanter Andrews & Selcer Ltd. ("Schechter") and Sontra's independent
accountant was Arthur Andersen LLP ("Andersen"). Because the Merger is being
accounted for as a recapitalization under generally accepted accounting
principles, the financial statements of Sontra, which have been previously
audited by Andersen, will constitute the financial statements of the
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Company beginning as of the consummation of the Merger on June 20, 2002.
Therefore, the Company has decided to continue the engagement of Andersen as its
independent accountants following the consummation of the Merger and,
accordingly, Schechter was dismissed as the Company's independent accountant.
The reports of Schechter on the Company's financial statements for the
fiscal years ended December 31, 2000 and 2001 did not contain an adverse opinion
or a disclaimer of opinion, nor were such reports qualified or modified as to
uncertainty, audit scope or accounting principles. The decision to change
accountants from Schechter to Andersen was approved by the board of directors of
the Company.
During the Company's fiscal years ended December 31, 2000 and December
31, 2001 and through the subsequent interim period to June 20, 2002, the Company
did not have any disagreement with Schechter on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure that, if not resolved to Schechter's satisfaction, would have caused
Schechter to make reference to the subject matter of the disagreement in
connection with its report. During that time, there were no "reportable events"
as set forth in Item 304(a)(1)(i-iv) of Regulation S-B ("Regulation S-B")
adopted by the Commission.
Schechter has been the Company's independent accountant since 1990 and
the Company has regularly consulted Schechter since that time and up to the
consummation of the Merger. The Company has not consulted Andersen during the
Company's last two fiscal years and through the interim period to June 20, 2002
regarding any of the matters specified in Item 304(a)(2) of Regulation S-B. The
Company has provided Schechter with a copy of this Form 8-K prior to its filing
with the Commission. Schechter has provided a letter to the Company, dated July
3, 2002 and addressed to the Commission, which is attached hereto as Exhibit 16
and is hereby incorporated herein by reference.
ITEM 5. OTHER EVENTS
The Nasdaq SmallCap Market has informed the Company that the
consummation of the Merger constituted a reverse merger under Nasdaq Marketplace
Rule 4330(f) and, therefore, the Company, upon the consummation of the Merger,
would be required to meet the initial listing requirements of the Nasdaq
SmallCap Market, rather than the Nasdaq SmallCap Market's continued listing
requirements. Accordingly, on June 24, 2002, the Company was notified by the
Nasdaq SmallCap Market that it failed to comply with certain initial listing
requirements and that, as a result, its common stock is subject to delisting
from the Nasdaq SmallCap Market, as described in the press release filed as
Exhibit 99.2 to this Current Report on Form 8-K, such press release being
incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Business Acquired.
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The required financial statements are incorporated by reference from
the Company's Registration Statement on Form S-4/A (File No. 333-86814) filed
with the Securities and Exchange Commission on May 16, 2002.
(b) Pro Forma Financial Information.
In accordance with Article 11 of Regulation S-X, because the Merger was
treated as a recapitalization for accounting purposes under GAAP, the Company is
not required to file pro forma financial statements in connection with the
Merger. However, in connection with the preparation of the Company's initial
listing application for publicly traded securities on the Nasdaq SmallCap
Market, the Company is filing its Unaudited Pro Forma Condensed Consolidated
Balance Sheet as of May 31, 2002, reflecting the transaction described in this
report. The Unaudited Pro Forma Condensed Consolidated Balance Sheet is included
as Exhibit 99.3 to this Current Report on Form 8-K and is incorporated herein by
reference.
(c) Exhibits
2.1 Agreement and Plan of Reorganization, dated as of February 27, 2002, as
amended as of May 14, 2002, by and among ChoiceTel Communications,
Inc., CC Merger Corp., a wholly owned subsidiary of ChoiceTel, and
Sontra Medical, Inc. (incorporated herein by reference to Annex A on
the Registration Statement on Form S-4/A as filed by ChoiceTel
Communications, Inc. on May 16, 2002).
16 Letter dated July 3, 2002 from Schechter Dokken Kanter Andrews & Selcer
Ltd. to Securities and Exchange Commission.
99.1 Press release issued by the Company on June 24, 2002.
99.2 Press release issued by the Company on June 28, 2002.
99.3 Unaudited Pro Forma Condensed Consolidated Balance Sheet as of May 31,
2002.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Sontra Medical Corporation
July 3, 2002 By: /s/ Sean Moran
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Sean Moran
Chief Financial Officer
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EXHIBIT INDEX
Exhibit Number Description
2.1 Agreement and Plan of Reorganization, dated as of February 27,
2002, as amended as of May 14, 2002, by and among ChoiceTel
Communications, Inc., CC Merger Corp., a wholly owned
subsidiary of ChoiceTel, and Sontra Medical, Inc.
(incorporated herein by reference to Annex A on the
Registration Statement on FormS-4/A as filed by ChoiceTel
Communications, Inc. on May 16, 2002).
16 Letter dated July 3, 2002 from Schechter Dokken Kanter Andrews
& Selcer Ltd. to Securities and Exchange Commission.
99.1 Press release issued by the Company on June 24, 2002.
99.2 Press release issued by the Company on June 28, 2002.
99.3 Unaudited Pro Forma Condensed Consolidated Balance Sheet as of
May 31, 2002.